Hitting budget goal likely to come at a cost

Pressure for low taxes adds to likelihood of service, personnel cuts

Published 9:36 pm, Saturday, March 6, 2010

STAMFORD -- City taxpayers will get their first glimpse Monday at the mayor's proposed $400 million-plus budget for the next fiscal year.

Campaign promises and recommendations by fiscal officials have pressured Mayor Michael Pavia and his administration to keep the tax burden at its lowest level in years.

But with an economy still floundering under the weight of the worst recession in decades, reaching that goal is expected to come at a cost.

City legislators and officials resisted estimating how high that price tag might be, speculating instead that a number of layoffs and service cuts are impending.

"Unfortunately, there are going to be quite a few layoffs," Board of Finance ChairmanJoseph Tarzia said last week. "More than many of us would want to see, but we don't have much of a choice."

The salaries and benefits of city employees make up more than 80 percent of departmental budgets, the biggest expense line in every budget.

"To try to get to a 1 percent tax increase, you're going to see a serious reduction in services," said Randall Skigen, the president of the Board of Representatives. "I don't think voters will be happy having both increased taxes and decreased services."

The Board of Finance recommended the mayor strive for a 1 percent tax increase in December.

The directors of departments and city agencies have been warned in memos from the budget office to expect anywhere from significant cuts to flat funding.

This could translate into a cut in operating hours at the Ferguson Library, a continuation of the public safety hiring freeze and service cutbacks in city operations.

One of the leading culprits is skyrocketing structural costs, Director of Administration Fred Flynn said. These costs could account for an additional $9 million -- what amounts to a 2 percent tax increase if no other cuts are made.

"Our objective is to present a fiscally responsible budget in a very difficult economic environment," Flynn said Friday. He declined to comment further until the budget is released Monday.

After a drop in the value of city pension accounts -- from $520 million in June 2008 to $450 million last December -- city contributions will have to increase by at least $5.5 million for the next fiscal year, to $9.4 million. Contributions to the health accounts for retired employees have also doubled, to $4.3 million. Health insurance costs are expected to rise 10 percent this year, said Peter Privitera, Office of Policy and Management director.

The effect of this year's 3 percent raises for seven city unions -- offset by furlough days -- will build another $1.2 million into the budget. That number is compounded by the "step" increases union members are due, Privitera said, although an estimate was not available.

The police, fire and 1199, or Smith House workers, unions are scheduled for 2 percent pay raises next year. The seven other city unions remain in talks with the city.

On the revenue side, the city saw the lowest grand list growth in years, and as of December, $2.9 billion of the $24 billion list of taxable property is under appeal. Compared with earnings two years ago, the general fund balance has dropped $11.3 million; the city's interest income and conveyance taxes are one-third of what they were.

"It's like the perfect storm," Tarzia said.

But other city officials said Stamford should have been better prepared for the rising costs and sinking revenues.

"We knew where the market was," Board of Finance member Tim Abbazia said. "There were no big surprises that I know of. We all knew there were going to be significant challenges."

These challenges will fall on the shoulders of the municipal departments and the Board of Education.

Despite Flynn's request for the Board of Education to pass along a $214 million budget -- a 2.5 percent decrease from this year's budget -- the board approved a $223.4 million budget late last month.

Schools Superintendent Joshua Starr's office has maintained that under a state statute called the Minimum Budget Requirement, if the elected boards cut the schools' budget below last year's $217.8 million, the city could lose Education Cost Sharing funds in the future.

But Board of Education members are prepared for more cutting, scheduling meetings on Tuesday and Thursday of this week, instead of later in the spring after the cuts are made.

"We are going to live with whatever number they give us, but the public wouldn't have an opportunity to know what it would look like if they cut us back to zero," Board President Jackie Heftman said last Tuesday.

She was referring to a cut that would eliminate the school board's annual budget increase, currently at 1.81 percent for next year.

In February, city department heads were asked to resubmit their budget proposals for the next fiscal year with 5 percent and 10 percent reductions.

Ernie Orgera, the city operations director, said last month that his department could not withstand a 10 percent cut without layoffs and service cuts. He did not return calls late last week.

Former Health Director Dr. Johnnie Lee said last month that a nursing program that targets seniors might have to be revamped to focus more on education.

City public safety workers are also expected to make cuts, which contractually cannot be relieved with layoffs.

Police Chief Robert Nivakoff said the department will forgo new hires and opt to recycle an old fire department vehicle as its mobile crime scene unit, saving at least $130,000. He is seeking to obtain private funding through the Police Foundation that would help buy heavy-duty ballistic vests and fund summer camps for children, he said.

"We're going to do our best to continue doing excellent police work and serving the community with what we have," Nivakoff said.

The Police Department is staffed at about 277 officers, down from 305 two years ago, union President Joe Kennedy said.

Kennedy said it is difficult for him to see where the Police Department could make additional cuts, especially when it has diminished in manpower over the years.

"Obviously, I'd like to see a zero percent cut," McGrath said. "It's going to be very hard to get down to 5 and 10 percent."

City agencies such as Ferguson Library and the Stamford Museum & Nature Center were also directed to expect no increase at best and "significant cuts" at worst.

Library President Ernest DiMattia said the library needs a 4.9 percent increase next year to continue operating library services at the same level, which includes a 3.25 percent pay increase for staff.

In 1990, the library was in operation for 250 hours per week; its hours have decreased to 160 per week, DiMattia said.

"It's been a 20-year ride downhill, relative to services," he said.

Melissa Mulrooney, executive director of the Stamford Museum & Nature Center, said that while it's premature to say how the center would balance the cuts, any decrease would be a blow.